In sharing first quarter results for fiscal 2022, which ended June 18, Albertsons said that a 6.8% increase in identical sales, and higher fuel sales with retail price inflation, contributed to Q1 net sales of $23.3 billion compared with $21.3 billion in the same period of 2021.
Albertsons’ Q1 net income was $484.2 million, or 84 cents per share, compared with $444.8 million, or 78 cents per share, during Q1 of fiscal 2021.
Adjusted net income was $582 million, or $1 per share, during the first quarter of fiscal 2022 compared with $517.5 million, or 89 cents per share, during the same period of fiscal 2021.
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Adjusted EBITDA was $1.4 billion, or 6.1% of net sales and other revenue, during the first quarter of fiscal 2022 compared with $1.3 billion, or 6.2% of net sales and other revenue, during Q1 of fiscal 2021.
Albertsons also reported a 28% hike in digital sales.
“In the first quarter, our teams continued to deliver strong operating and financial performance across all key metrics, and we continued to gain market share,” CEO Vivek Sankaran said.
“As we look forward to the balance of the year, while we are thoughtful about the macro environment and the possible implications on consumer behavior, our teams have consistently demonstrated their ability to adapt to a changing back drop in real time,” he said.
“This puts us in a strong position to continue to execute against our customers for life strategy, including more deeply engaging our customers both digitally and in-store, and delivering against our productivity agenda,” Sankaran said. “We are so proud of the resilience, agility and passion of our teams and their ongoing service to our customers and communities.”
Albertsons’ gross margin rate decreased to 28.1% during the first quarter of fiscal 2022 compared with 29.1% during the same period last year. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 27 basis points compared with the first quarter of fiscal 2021.
The grocery store chain said that the decrease was driven by fewer COVID-19 vaccines in the first quarter of fiscal 2022 compared with last year. The pandemic impact was partially offset, however, by the gross margin rate benefits from its productivity initiatives, offset by inflationary increases in product and supply chain costs, the retailer noted.
Its selling and administrative expenses decreased to 25.2% of net sales and other revenue during the first quarter of fiscal 2022 compared with 25.9% during the first quarter of fiscal 2021. Excluding the impact of fuel, selling and administrative expenses as a percentage of net sales and other revenue decreased 15 basis points. The decrease in selling and administrative expenses was primarily attributable to lower COVID-19-related expenses and the execution of productivity initiatives.
This decrease was partially offset by expenses related to the company’s investments in its digital and omnichannel capabilities and other strategic priorities, increased employee costs, and higher depreciation and amortization. The increase in employee costs was the result of market-driven wage rate increases and higher equity-based compensation expense, Albertsons said.
In providing an updated fiscal 2022 outlook, Albertsons said it now expects identical sales in fiscal 2022 of approximately 3% to 4% (previously 2% to 3%), adjusted EBITDA in the range of $4.25 billion to $4.35 billion (previously $4.15 billion to $4.25 billion) and adjusted net income per share in the range of $2.80 to $2.95 per share (previously $2.70 to $2.85 per share).